China CNR Says Board Approves Hong Kong Stock Exchange Listing

By Bloomberg News -
Nov 22, 2013

China CNR Corp. (601299), the nation’s
second-biggest maker of trains, said its board approved a plan
to seek a listing on the Hong Kong stock exchange.

The company will sell as many as 1.82 billion H shares,
representing about 15 percent of its total share capital after
the offering, China CNR said in a statement to the Shanghai
exchange today. Based on China CNR’s closing price of 5.23 yuan,
the listing may raise about 9.5 billion yuan ($1.6 billion).

The timing and pricing of the offering, which still needs
approval from shareholders and the securities regulator, have
not been set yet, according to the statement. Larger rival CSR
Corp. (1766) trades in Hong Kong at 16.5 times this year’s estimated
earnings, a premium over the 15.8 times multiple its shares
trade at in Shanghai, according to data compiled by Bloomberg.

China CNR is seeking to raise funds as Chinese rail
equipment makers seek expansion into new markets overseas and
prepare for another round of bidding for high-speed trains in
China. Thailand’s Prime Minister Yingluck Shinawatra said in
October Chinese trainmakers had expressed interest in developing
the nation’s high-speed train system.

Shares of China CNR have climbed 26 percent since the end
of September, while CSR’s Shanghai-traded shares have gained 23
percent over the period.

China CNR will use the proceeds from the Hong Kong stock
sales to fund overseas projects, equipment purchases and
research and development, it said in the statement.